Too Good To be true
By Soji Akinrinade, in London
Wednesday, March 23, 2005
It is meant to make communications faster and business life easier. Unfortunately the internet has also spun a host of illegal and fraudulent activities which bilk consumers of billions of naira every year. If you are regular user of the internet, chances are that your email box would have been bombarded with unsolicited mails either claiming that you have won some stupendous prizes or asking you to update your banking details at a bogus website. If you are gullible and have responded to such mails, chances are that you would have lost some money to con artists who have infested the World Wide Web.
In the United Kingdom, financial scams and identity frauds have become such a menace that the country's department of trade and industry, DTI, said it wound up about 400 scam companies in 2004. It has also estimated that unsuspecting British consumers lose about £1 billion or N260 billion yearly to various get-rich quick schemes and fake loan offers.
According to the DTI, vulnerable people, especially unsuspecting old pensioners are, sometimes lured into investing in non-existing building or buy-to-let schemes, often in other countries. Those who are attracted by such offers often lose thousands of pounds to tricksters. Similarly, loans are also often offered to consumers regardless of their credit history or whether they are even in any position to pay off such loans. The condition usually attached to the loan offer is the payment of a one-off insurance fee. Ironically, the fee must be paid before the loan can be granted. The fee is paid but the loan never comes.
However, it is not only the ordinary consumers who are victims of these accomplished con artists. Small businesses too are victims. Some business concerns without permanent premises but with post office box addresses often pose as representatives of legitimate public agencies to make money from unsuspecting directors. In 2003, Nigerian Magazines Limited, NML, based in Middlesex, UK, fell victim of an agency claiming to represent the Data Protection Agency, DPA, which ensures that consumer data is well protected according to some laid down rules. NML was asked to pay £90 to ensure registration with the DPA. Although the money was paid, NML directors eventually found out from the DPA, that the company was not its representative and that registration only costs £36. NML was able to recover £40, losing £50 to "charges". Many more companies were victims of the same scam.
Probably the fastest growing scam in Britain today is the lotteries' scam. Consumers are told either by unsolicited phone call or email that they have won lottery prizes. The catch, however, is that they are required to first send money to cover "taxes" and "processing fee" before they can claim their winnings. In addition, callers or the emails often ask potential victims to dial premium rate numbers to collect information about their winnings. Those who fall prey to this trick are invariably saddled with hefty telephone bills, after paying £1.50 per minute for the calls, rather than the 3p - 5p per minute regular phone tariff.
But what is worrying the British government most is identity fraud, which is arguably the biggest financial crime it faces. Fraudsters use unsuspecting victims' financial and other personal details to illegally obtain credit, cash and goods. According to UK's Credit Industry Fraud Prevention Systems, identity fraud cases are rising by 30 per cent every year. In 1999 there were about 20,000 identity fraud cases, but the figure is expected to jump to an astronomical 130,000 cases this year, earning the United Kingdom the dubious honour of Europe's leading identity fraud hotspot. In many cases, financial details of victims are stolen from discarded bank and credit card records in garbage dumps or through the outright theft of such documents from the victims' homes.
In the case of Sonia Lorraine, an aesthetician in Teddington town in Middlesex, who left Nigeria in 1995 for the UK, the theft of her identity started with her stolen British passport. Although the passport was stolen in a robbery incident in Lagos, the passport found its way back to the UK with a woman who subsequently established herself as Sonia Lorraine, who went on a shopping spree totting up thousands of pounds in bills on hire purchases from different High Street stores in London. When the fake Sonia Lorraine failed to make the usual payments on her purchases, the companies she owed, including Comet, sellers of home and electrical appliances, asked credit collection agencies to chase the bills. The real Sonia Lorraine was threatened with court charges unless she paid the bills. It took months of painstaking reconstruction of her life as a British citizen to finally convince the agencies that her identity had been used illegally.
But those who commit identity fraud have become even more sophisticated. They use a modus operandi called phishing. This is when fraudsters send random emails asking internet users to update their bank account details. Bogus websites where the changes are to be made are set up to look exactly like those of the companies that are being scammed. Last year, one of the biggest banks in Britain National Westminster, had to temporarily suspend parts of its web operations after they fell victim of phishing. Other banks have also had their websites attacked by fraudsters.
Andrew Ade-Kunle, an IT expert and owner of the Cambridge IT Consultants, in Cambridge told Newswatch that the problem is an international one and it is very difficult to deal with. According to him, the fact that the West cherishes freedom of information means that the internet has become an all comers affair "Anyone can get on the internet and do practically anything he wants. In fact, it is not subjected to rigorous rules and regulations. And if the truth be told, it is not easy to regulate the internet, so fraudsters would continue to multiply," according to Ade-Kunle. "To really make a dent in the problem would require the joint effort of many countries, which may be impossible to achieve," he added.
Like Ade-Kunle, who believes that the internet user has the primary responsibility to safeguard personal information, the British government too has been campaigning hard and urging consumers to take even the most basic steps to protect themselves and information about them.
Although Prime Minister Tony Blair's government intends to use the national identity card it has proposed to crack down on identity fraud, a key to avoiding being duped, according to the DTI, is for consumers to make sure that their bank and credit card statements and other important papers with sensitive personal details are shredded before being discarded. In addition, finance industry experts believe consumers should check their bank/credit card statements regularly and promptly report suspicious transactions; check that letters, faxes and emails are genuine and never disclose, write down or store their PIN numbers and passwords.
Generally, however, the rule of thumb is that if it is too good to be true, it really is. So don't touch it.
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